Provincial-level regions urged to do more to attract overseas money

Major provincial-level regions that serve as magnets for foreign investment across China should remain open to innovative ideas and models that stay ahead of the curve and adapt to changing global dynamics and emerging economic trends to better attract foreign capital, officials and experts said.

Additionally, the regions should increase the number of services for foreign-invested business, promote the accelerated implementation of foreign investment projects and give full play to the role of open platforms such as pilot free-trade zones, ensuring their smooth entry and operation in the local market, they added.

During a symposium in early July, Vice-Premier He Lifeng called for the further relaxation of market access for foreign investment. He also said the nation should take advantage of its enormous market to attract overseas capital.

In particular, provincial-level regions that are major recipients of foreign capital should take steps such as improving services for foreign-invested companies and making use of open platforms, He said.

Guangdong province recently unveiled a plan that introduced significant incentives to encourage foreign investment, with the highest rewards reaching up to 150 million yuan ($20.63 million) for high-tech manufacturing enterprises. Similarly, foreign-invested businesses in high-tech service industries can receive incentives of up to 80 million yuan.

The provincial-level regions need to adopt a targeted approach to attract foreign investment, taking into account their unique industrial structures and development needs, said Zhou Mi, a senior researcher at the Chinese Academy of International Trade and Economic Cooperation.

One such approach involves encouraging foreign enterprises to participate in large-scale equipment upgrades and government procurement projects on equal footing with domestic enterprises, Zhou added.

In addition, such regions should leverage various open platforms such as free trade zones to attract foreign investment, according to experts.

In March, the State Council, China's Cabinet, rolled out a guideline to better attract and utilize foreign investment, proposing the implementation of pilot projects to ease market access for foreign investment in the field of technological innovation.

As part of this plan, Beijing, Shanghai, Guangdong and other areas with free trade zones will be allowed to select eligible foreign-invested enterprises to participate in expanded opening-up pilot projects in areas such as gene diagnostics, treatment technology development and application.

Free trade zones and other open platforms in China, with their strong economic foundations and institutional innovation advantages, are playing a pioneering role in exploring new investment ideas and models, said Xiao Benhua, an expert on free trade zones at the Shanghai Lixin University of Accounting and Finance.

A digital investment platform that harnesses the power of big data and artificial intelligence could be established on a trial basis in provinces with local resource advantages to meet the needs of foreign enterprises, Xiao said.

Also, by understanding the specific requirements and preferences of each company, the platform can offer tailored solutions and recommendations. This includes identifying suitable investment locations, connecting companies with local partners and suppliers and providing information on relevant policies, regulations and incentives, the expert added.

China should take proactive steps to foster the development of cross-border e-commerce, providing convenient customs clearance services and policy support to attract foreign investment in the rapidly growing sector, Xiao said.

China's cross-border e-commerce trade value grew 15.6 percent year-on-year to 2.38 trillion yuan in 2023 and is expected to increase to 2.95 trillion yuan this year, according to the Ministry of Commerce.

In addition to the coastal provinces, the central and western regions are increasingly becoming attractive destinations for foreign investors.

According to a recent survey conducted by PricewaterhouseCoopers in February, 30 percent of the surveyed companies said that China's central and western regions hold tremendous opportunities. Furthermore, 17 percent said they have plans to allocate at least half of their investments to those regions within the next one to three years.